Tag Archives: market report

How is COVID affecting property prices in the Alps?

Contrary to the received wisdom in the media we are not seeing a drop in demand or a reduction in prices for property in the Alps.

The popular press is predicting a drop in prices. We won’t list the articles on this subject. They certainly play well to our assumptions. And if you are in the market for a property, it plays well to your hopes! However, it is not our experience on the ground.

If you don’t have time to read on, then I will summarise our findings here. These are based on our historical record that goes back 20 years. We have increased activity on our website, and so far this month we have almost record numbers of enquiries. I say “almost” because as I write this, the month is not finished. But on the performance so far, enquiries for May 2020 could break our record. And since the beginning of our confinement, we have agreed 16 sales. Our prediction during this confinement would have been zero sales! The ratio of agreed prices to asking prices is minus 3.7%. Based on previous experience that is completely normal. Unless the property is new to the market and there seems to be other interest people will often make a lower offer than the asking price.

I’ll breakdown our 16 agreed sales here.

  • Average property price 422,750€
  • Agreed offer on average 3.7% lower than asking price.
  • Ranging from 62.000€ to 1.595m€
  • 8 Anglophone buyers (based in the UK or elsewhere)
  • 7 Francophone (mostly based in France)
  • 1 Finn

There are 2 distinguishing features of these buyers

  • 80% of them are new to us this year. Normally that would be about 50%, many of our customers spend some time looking for a property.
  • Most of them don’t need a mortgage, and therefore don’t need rental to help pay for the purchase. In fact, less than half of them see a rental return as important.

At the moment we are experiencing two types of buyers

  • Buyers in the middle of a purchase. Something they might have started last year, a long term project, they have signed the first contract and would normally be finalising the purchase at this point. COVID has destabilised these sales. The world they knew before they made the decision to buy has changed, and they are not sure about the future. Many of them are having second thoughts. Sometimes forced upon them by financial worries. Inevitably some of our sales agreed before COVID will falter and the properties will return to the market.
  • New buyers, buyers who have had the dream of an Alpine home for a while and have made the decision to take the plunge during this crisis. These sales may well be more secure. As far as these purchasers go, the world situation can only improve (and seems to be doing so).

So what is the main motivation of these new buyers? Some have suggested that they are looking for a lock-down bolthole. We don’t think that is the case. Travelling during the lockdown to a second home has been outlawed. Most (but not all!) have remained at their principal residence. We get the feeling that these “new” customers are reevaluating their lives and priorities. They are taking the opportunity to follow a dream. When you think of your own situation you might be able to emphasise with a reset of what your own aims and objectives are!

If you are interested you can see the list of properties we have recently sold on our “SOLD” property page. This is somewhat old news though. Contact us if you would like a more detailed breakdown of our sales.

Some editorial in French Property News

We got featured twice in French Property News last month (February 2017).  Once in the “Ask the agent” feature and also a couple of properties in their “On the Market” page.

Click on the links to see the articles. We are in March’s issue too, but you’ll have to buy that to see the article (any good Newsagent or from their website) or wait until next month when I’ll publish it here.

In the “ask the agent” bit I think they caught me at a bit of a low moment just before it snowed in January! Now we’ve got some snow the response would be more positive !

“interest has picked up again, and the buyers in the market are serious. In fact the ratio of buyers to browsers is as good as it gets. Couple that with a willingness from the sellers to negotiate a little and the market is ticking along fine”.

ask the agent

 

on the market

 

St Gervais market report

Sarah Watts covers Les Contamines for us but knows St Gervais well. She has just written this market report for a customer. Prices have been broadly stable in St Gervais since 2008. Currently the price advertised is rarely the price paid so, if you see something that seems much too high, it’s likely to be due to an unrealistic valuation or vendor who is not willing to accept the current market conditions, and it is unlikely to be selling.

St Gervais in winter

According to meilleursagents the average price of an apartment in St Gervais is between 2317€ to 4742€ per metre squared, with the average sale being around €3 493 per m2. These figures seem out of touch with reality to me. For a property close to the ski lift that is new or in good condition this price could easily be closer to 4,900€/m2 and good quality new build properties can be more than that.

A chalet would be around the 5500-6000E per m2 for something nice. The prices are very dependant on the quality of finish, there is plenty of property on the market that is feeling quite “tired” by today’s standards.

We have 3 sales going though at the moment in St Gervais. The agreed prices were between 2% and 10% below the asking price. We have just had an offer accepted this week on a 4th property at asking price.

Should you be looking for a 3/ 4 bedroom apartment, you are looking at somewhere around 350-450K. For a chalet in good condition – 650-750K, and a chalet that needs refreshing around 500K.

Property prices vary enormously depending on how close it is to the skiing or at the very least the bus route, the amount of sun, views, outside space and condition. People are often concerned about buying outside of the very centre of the town in case it is “unrentable”. As I often point out, unless you are walking distance in ski boots from the lift (probably a 300m max, you’ll end up taking the car and parking at the free lift car park there for the day. Consequently, if you drive 3 minutes or 6 minutes at the end of the day, it won’t much difference.

I have also personally rented for many years in the past and the fact the property was 3km from town and the skiing, was not an issue. What did make a difference was the garden space. If you get a traditional ski apartment, then it will rent well in the winter, but not in summer if there is no outside space. Some people want to be close to the centre of the village (again more useful in the summer),  Bettex for example is favoured by the skiers because of it’s proximity to the slopes in winter.

Train St Gervais

Nearly all people renting will cover their running costs of the apartment and maybe even make a little profit. You can rent comfortably 8-10 wks in winter and, with an outside space, about 4 weeks in summer.

If you would like to get an idea of rental values  take a look at this website holidayinalps.com for some ideas of what rents and for how much. As a guide, for a 5 bedroom high-end chalet this could earn upwards of 35K€ per year gross income. A more modest 3 bedroom ski apartment would be around 15K€ per year.

In terms of suggestions for 3+ bedrooms, I would recommend

Apartment Lumen http://www.alpine-property.com/index.php?page=prop_3_aptlumen

Apartment Crespin http://www.alpine-property.com/index.php?page=prop_3_aptcrespin

We have also extensively written about the area on our area guide here, scroll down for St Gervais info on each of the pages: http://www.alpine-property.com/index.php?page=page461

Finally, remember that on all property a notaire (stamp duty + solicitor fee) is due. This is 7% for older property and 2.5% for new build from a developer (the first figure will increase slightly Q2 2014).

The general feeling is that the market has turned a corner and the prices will not fall from here.

We have just launched the La Comtesse apartments on our website. They are located in the very centre of St Gervais village and will benefit from 2.5% fees.

Appt. La Comtesse, #1, 1 bedroom and 189 000€

Appt. La Comtesse, #2, 3 bedrooms and 395 000€ 

Appt. La Comtesse, #4, 3 bedrooms and 415 000€

Appt. La Comtesse, #6, 5 bedrooms and 650 000€